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|Intelsat Reports Fourth Quarter and Full Year 2014 Results|
For the year ended
The path forward for us is clear: design, build and place into service new satellite capacity; introduce services that leverage our ground network and networking capabilities; and develop advanced ground technologies and other innovations that will simplify access to our satellites. Through these initiatives, combined with supporting the growth of our core customers and optimizing the use of our orbital rights and global presence, we will enhance our ability to address larger and higher growth applications. By executing on these priorities, we will be positioned for success once our new inventory becomes available.”
Fourth Quarter and Full Year 2014 Business Highlights
Network Services comprised 46 percent of Intelsat’s total fourth quarter
2014 revenue, and at
Media comprised 37 percent of the company’s revenue for the quarter
Government comprised 16 percent of our revenue for the quarter ended
Average Fill Rate
Intelsat’s average fill rate on our approximately 2,200 station-kept
transponders was 75 percent at
Capital Markets and Finance Activities
Financial Results for the Three Months ended
On-Network revenue generally includes revenue from any services delivered via our satellite or ground network. Off-Network and Other revenue generally includes revenue from transponder services, Mobile Satellite Services (“MSS”) and other satellite-based transmission services using capacity procured from other operators, often in frequencies not available on our network. Off-Network and Other Revenue also includes revenue from consulting and other services and sales of customer premises equipment.
Total On-Network Revenue decreased by
Total Off-Network and Other Revenue increased slightly by
For the three month period ended
Direct costs of revenue increased by
Selling, general and administrative expenses increased by
Depreciation and amortization expense decreased by
Interest expense, net consists of the interest expense we incur
together with gains and losses on interest rate swaps, which reflect net
interest accrued on the interest rate swaps as well as the change in
their fair value, offset by interest income earned and the amount of
interest we capitalize related to assets under construction. As of
The decrease in interest expense, net was principally due to the following:
The non-cash portion of total interest expense, net was
Loss on early extinguishment of debt was
Other expense, net was
Provision for income taxes was
Cash paid for income taxes, net of refunds, totaled
EBITDA, Adjusted EBITDA, Net Income, Net Income per Diluted Common Share and Adjusted Net Income per Diluted Common Share
Adjusted EBITDA was
Net income attributable to
Net income per diluted common share attributable to
Adjusted net income per diluted common share attributable to
Free Cash Flow from (used in) Operations
Free cash flow used in operations1 was
Payments for satellites and other property and equipment during the
three months ended
Financial Outlook 2015
Intelsat’s 2015 revenue guidance reflects the impacts noted above as well as the impact from no new capacity expected to be placed into service in 2015.
We expect capital expenditures ranges of:
Capital expenditure guidance for 2015 through 2017 assumes investment in twelve satellites in the manufacturing or design phase during the Guidance Period. In addition, a custom payload is being built for us on a third-party satellite which will not require capital expenditure. We expect to launch one satellite in 2015, four satellites in 2016, and two satellites in 2017, and will continue work on five remaining satellites for which construction will extend beyond the Guidance Period.
We expect to launch two of our new Intelsat EpicNG high-throughput satellites during the 2016 and 2017 Guidance Period years, increasing our total transmission capacity. By the conclusion of the Guidance Period in 2017, the net number of transponder equivalents will increase by a compound annual growth rate (CAGR) of 7.8 percent as a result of the satellites entering service during the Guidance Period.
Our capital expenditures guidance includes capitalized interest.
Prepayments: During the Guidance Period, we expect to receive significant customer prepayments under our existing customer service contracts.
We expect prepayment ranges of:
The annual classification of capital expenditure and prepayments could be affected by the timing of achievement of contract, satellite manufacturing, launch and other milestones.
Prepayments during the three months ended
Cash Taxes: Expected to be approximately 1.5 percent of revenue for each of the next several years.
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1In this release, financial measures are presented both in accordance with GAAP and also on a non-GAAP basis. EBITDA, Adjusted EBITDA, free cash flow from (used in) operations, Adjusted net income per diluted common share and related margins included in this release are non-GAAP financial measures. Please see the consolidated financial information below for information reconciling non-GAAP financial measures to comparable GAAP financial measures.
Q4 2014 Quarterly Commentary
As previously announced,
Conference Call Information
Intelsat Safe Harbor Statement:
Statements in this news release and certain oral statements from time to time by representatives of the company constitute "forward-looking statements" that do not directly or exclusively relate to historical facts. When used in this earnings release, the words “may,” “will,” “might,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “intend,” “potential,” “outlook,” and “continue,” and the negative of these terms, and other similar expressions are intended to identify forward-looking statements and information. Forward-looking statements include: our expectation that our media business will benefit in the near to mid-term from the launch of three satellites which serve our video neighborhoods; our plans for satellite launches in the near to mid-term; our guidance regarding our expectations for our revenue performance, including in our different customer sets, and Adjusted EBITDA performance in 2015; our capital expenditure and customer prepayment guidance for 2015 and the next several years; our expectations as to the increased number of transponder equivalents on our fleet over the next several years; our expectations as to the level of our cash tax expenses over the next several years; our debt repayment guidance for 2015; and our belief that as we execute on our initiatives, we will build the inventory and service capabilities to allow us to capture future growth, including in emerging opportunities that we believe represent larger and more sustainable markets for our services.
The forward-looking statements reflect
Because actual results could differ materially from
EBITDA is not a measure of financial performance under U.S. GAAP, and our EBITDA may not be comparable to similarly titled measures of other companies. EBITDA should not be considered as an alternative to operating income (loss) or net income (loss), determined in accordance with U.S. GAAP, as an indicator of our operating performance, or as an alternative to cash flows from operating activities, determined in accordance with U.S. GAAP, as an indicator of cash flows, or as a measure of liquidity.